PVRs stand to revolutionize how we watch TV, skipping commercials along the way

Matt Beer, EXAMINER TECHNOLOGY WRITER

Published 4:00 am, Monday, March 29, 1999

Think of it as TV version 2.0.

New technology that two Bay Area companies are racing to release could fundamentally alter viewers' relationship with the tube.

On Monday, TiVo Inc. of Sunnyvale will unwrap its long-rumored Personal Television Service, which consists of a set-top box equipped with a massive hard drive. The box records television shows onto a hard drive that will initially be able to hold between 10 and 30 hours of programming.

The TiVo device, which will ship on Wednesday, beats to the shelves a similar product to be unveiled soon by Replay Networks, a Palo Alto-based start-up.

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Both products are commonly referred to as Personal Video Recorders (PVR). They contain sophisticated software that allows viewers to stage their own replays, catch up on shows already in progress, index and select recorded shows and eliminate commercial breaks.

Analysts consider it a quantum leap over VCRs as far as viewers' ability to control what they watch when they watch it.

A report released Friday by the Cambridge, Mass.-based high-tech market research firm Forrester Research, Inc. predicts that TiVo, Replay and future PVRs will initially reduce broadcast commercial viewership by 8 percent, eventually cutting TV ad watching in half within 10 years.

"They (PVRs) will have an incredible impact on the television industry," said Josh Bernoff, a TV analyst who helped write the Forrester report. "It's something the networks should be very afraid of."

Use telephone lines&lt;

Both TiVo and Replay devices will be connected to a household telephone line, which downloads commands from the PVR companies to the set-top boxes.

The companies will direct the machines to capture shows coming in via the home's cable, satellite or antenna. The shows are stored onto the hard disk. Later, the viewer can choose to watch these programs via an on-screen interactive index, deleting them at will and erasing the advertisements.

The selection of shows is controlled by the user or a cadre of company programmers, who order the PVR box to capture shows based on a viewer's past preferences.

The devices also will allow users to record and view shows simultaneously. A viewer can back up and watch portions of the show, skipping commercials along the way. For example:

A user can order the PVR to begin recording a show at 8:30 p.m. Then the viewer can begin watching the show at 8:40, as it plays back from the hard drive. Along the way, the viewer can skip commercials. By the end of the show, the user will have caught up to the live version of the program, having skipped the advertisements.

Could hurt networks&lt;

"Once viewers learn they can do this, the networks are going to take a very big hit," said Bernoff. "It has the potential to really do them some damage."

Both TiVo and Replay have been the quiet darlings of Silicon Valley.

TiVo Inc., financed by Silicon Valley venture capital and a partnership with the giant Dutch-based Royal Philips Electronics company, was founded in 1997 by former Silicon Graphics executives Michael Ramsay and James Barton. According to its Web site, TiVo's board of directors includes high-tech pundit Stewart Alsop and WebTV founder Randy Komisar.

WebTV is the Internet / TV combination service bought out by Microsoft last year. Microsoft is rumored to be readying its own PVR version of WebTV, which could appear on shelves later this year.

Replay TV, also founded in 1997, counts Netscape co-founder Marc Andreessen as a seed investor. It also has received money from Vulcan Ventures, a venture capital firm headed by Paul Allen, co-founder of Microsoft. According to the TiVo Web site, the base service will cost $9.95 per month, with discounts available for those who sign up for extended periods.

The basic TiVo box will cost $499.

Replay more expensive&lt;

Replay has yet to announce pricing, but sources say its equipment will be more expensive, although the telephone link will be free.

According to the Forrester report, most TV execs interviewed by the company are either ignorant of the technology - a third had not heard of the devices - or pooh-poohed its success.

"While a few expected these devices to have far-reaching consequences," stated the report, "most were skeptical."

Among the comments in the report: "TV viewers are basically lazy; just because technology exists doesn't mean they use it," one TV professional said. "Even now, people don't use their VCR often for taping shows."

Bernoff, who has previewed both machines, said the technology is still crude. "We're about two years away from where the public will be really interested in them," he said. "The interface is a little clunky."

Bernoff added that the machines will reach a widespread audience once their capacity increases. "They also hold only eight hours of video," he said. "It isn't until they can hold 25 to 100 hours of video that it'll really hit.

"Once that happens," he added, "it will completely change the way people watch TV. People will have 100 hours worth of stuff on their hard drive that is recorded in anticipation of their taste." &lt;